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As businesses grow and expand, there is an inherent need to assess whether they are creating value for the shareholders. Although businesses may have achieved growth and a reasonable return on investment, creating value is the result of a sustainable process of value creation. This programme is designed to cover the concept of value creation and the determinants of value of a business.

The course provides practical insights into the value creation dynamics and its application in running a business. The module concludes with demonstrating the linkages between business strategies and sustainable value creation, through a real life case study.

While there are procedures and formulas, they need to be integrated with good business judgments.

Princeton Academy resources

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  1. Calculate and compare advantages and weaknesses of capital budgeting techniques, especially the NPV and IRR of a project.
  2. Demonstrate how different qualitative factors impact on value.
  3. Calculate free cash flow forecasts and the challenges in determining their proper use
  4. Calculate the terminal value of a business and determine its appropriate use
  5. Discuss Relative Valuations Techniques among comparable companies
  6. Explain why WACC is used to discount company free cash flows
  7. Discuss other valuation methods including CAPM and Arbitrage Pricing Theory
  8. Determine the optimal capital structure of a company and its dividend policy

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The programme will be delivered through a well-structured schedule with the academic content being followed by case studies to demonstrate the applicability of the concepts. The case studies on valuation will be thought provoking and will contribute significantly to the overall learning experience.

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Session Objective Contents
Valuation To understand the concept of valuation Concept of value creation Determinants of value Importance of Value Creation
Weighted Average Cost of Capital   To estimate the cost of debt and equity Cost of Debt Cost of Equity using the CAPM Beta Factor- Systematic Risk
Valuation Methodologies   To demonstrate the asset based, cash flow based and multiples based methods of valuation Book value, Adjusted book value   Replacement value and Liquidation Value Dividend Discount Model Cash Flow Estimation, Discrete Value and Terminal Value Determination Market Multiple Valuation – Peer group valuation – Industry comparables, Market comparables, EBITDA, P/E etc
Value Drivers   To understand the value drivers of a business Strategies for Value Creation  
Case Study on Valuation     Real life case study on developing skills in identification of the value drivers and evaluating the impact of managerial decisions on value creation